DAX Index Today: French Election Polls and China Tariffs to Keep Investors on Edge

The Overview of the DAX Performance

On Friday (June 14), the DAX declined by 1.44%. Following a 1.96% slide on Thursday (June 13), the DAX ended the session at 18,002.

Eurozone Trade Surplus Narrows in April

The trade surplus for the Euro area narrowed from €23.7 billion to €15.0 billion in April. The energy sector reported a wider trade deficit, while the chemical sector registered a narrower trade surplus.

However, the trade data had a limited impact on the DAX. Market jitters about the snap French election sent the European equity markets into negative territory.

According to the BBC, RN leads with 29.5% of the vote in the first round, with the left-wing alliance holding 28.5% of the vote, leaving Macron third in the polls.

US Consumer Sentiment Sinks in June

Later in the session on Friday, Michigan Consumer Sentiment figures attracted investor attention. The Michigan Consumer Sentiment Index fell from 69.1 to 65.6, testing investor bets on a soft US landing.

On Friday, it was a mixed session for the US equity markets. The Nasdaq Composite Index gained 0.12%. However, the Dow and S&P 500 declined by 0.15% and 0.04%, respectively.

The Friday Market Movers

Bank stocks extended their losses from Thursday over fears related to the EU project. Commerzbank slid by 4.41%, with Deutsche Bank falling by 0.77%.

Investor fears of a China retaliation to EU tariffs on EV imports from China impacted buyer demand for auto stocks. Daimler Truck Holding declined by 2.35%. BMW and Porsche saw losses of 1.54% and 1.26%, respectively. Volkswagen declined by 1.18%, with Mercedes Benz Group falling by 0.71%.

Risk aversion affected the tech sector. Infineon Technologies slid by 3.77%, with SAP falling by 1.80%. Siemens Energy AG declined by 0.39%.

Eurozone Consumer Inflation Expectations and Wage Growth

On Monday (June 17), Eurozone consumer inflation expectations and wage growth figures warrant investor attention.

Economists forecast wages to increase 2.8% year-on-year in Q1 2024 after an increase of 3.1% in Q4 2023.

Furthermore, economists predict Consumer Inflation Expectations to fall from 3.0% to 2.8% in April.

Softer-than-expected wage growth figures and downward trends in consumer inflation expectations could raise investor bets on a July ECB rate cut.

However, investors should monitor ECB chatter, French election-related news, and tariff-related chatter.

ECB President Christine Lagarde and Chief Economist Philip Lane are on the calendar to speak. ECB Executive Board member Luis de Guindos will also deliver a speech.

Views on inflation, the economic outlook, and interest rates need consideration. Furthermore, investors should track French election-related comments and possible influence on the ECB rate path.

US Manufacturing Sector in Focus

Later in the session on Monday, NY Empire State Manufacturing Index numbers will garner investor attention. Recent US economic indicators have raised investor bets on a September Fed rate cut. However, an unexpected slide could fuel fears of a hard landing.

Beyond the numbers, investors should track FOMC member commentary. Views on the economic outlook, inflation, and the timing of a Fed rate cut could move the dial.

Near-Term Outlook

Near-term trends for the DAX will hinge on the French election poll, EU-China tariff-related news, and central bank chatter. Rising threats of a far-left or far-right victory in France and a Beijing retaliation to EU Commission tariffs in China EVs could affect buyer demand for DAX-listed stocks.

On the Futures markets, the DAX and the Nasdaq mini were up by 37 and 15 points, respectively.

Economic indicators from China influence market risk appetite before the European opening bell.

DAX Technical Indicators

Daily Chart

The DAX remained comfortably below the 50-day EMA while holding above the 200-day EMA, sending bearish near-term but bullish longer-term price signals.

A DAX return to 18,200 could give the bulls a run at the 50-day EMA. A breakout from the 50-day EMA could signal a move to 18,500.

Eurozone wage growth, the French election polls, and central bank commentary require consideration.

Conversely, a DAX drop below the 18,000 handle could signal a fall toward the 17,750 handle.

The 14-day RSI at 37.17 suggests a fall to the 17,750 handle before entering oversold territory.

4-Hourly Chart

The DAX hovered below the 50-day and 200-day EMAs, sending bearish price signals.

A DAX break above the 200-day EMA would support a move to the 18,250 handle. A breakout from the 18,250 handle could give the bulls a run at the 50-day EMA.

However, a DAX drop below 18,000 would bring the 17,615 support level into play.

The 14-period 4-hour RSI at 31.75 indicates a DAX drop below 18,000 before entering oversold territory.